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For more than a decade, state regulators allowed
Kaiser Permanente Northwest
and Oregon Health & Science University to avoid reporting
malpractice
claims made against their doctors, despite laws tailored to require
such
reports.

Legislators crafted the laws to give the state's
physician watchdog
agency a key tool for finding potentially dangerous doctors. But weak
enforcement
of the laws has left the state's Board of Medical Examiners missing 18
years' worth of data on malpractice cases involving about one in every
seven Oregon doctors.

That lack of data had consequences.

If Kaiser had been reporting malpractice claims, the
first clues about
Dr. Jayant M. Patel would have arisen in 1993, when two Portland men
sued
over operations that left them impotent. During the next three years,
Patel's
work as a surgeon figured in five more malpractice claims, none of
which
was reported to the board.

Instead, Oregon regulators learned about Patel in
mid-1998, and then
only when Kaiser informed them after restricting his practice. Patel,
who
left Kaiser in 2001, made international headlines earlier this year in
Australia, where authorities said 13 of his patients at a Queensland
hospital
died because of substandard care he provided.

Patel's case shines a spotlight on Oregon's largely
unseen physicians
oversight system, which was among the first to require malpractice
insurers
to report any claims they received. The idea was simple: Medical
experts
would sift through the claims, then investigate if they suspected
negligence
or detected a pattern of incompetence.

But the two state agencies responsible for
collecting the reports and
enforcing the law paid scant attention to compliance through the 1990s,
an investigation by The Oregonian found. And when regulators eventually
pushed Kaiser and OHSU to report, the health system and university
dragged
their heels and argued the laws didn't apply to them.

The Board of Medical Examiners did not learn until
2000 that Kaiser
had quit filing reports nine years earlier. Kaiser's explanation for
doing
so, regulators now assert, was based on an erroneous reading of the
law.

In OHSU's case, Kathleen M. Haley, executive
director of the board,
said she learned soon after taking the job in 1994 that claims weren't
being relayed. Haley said she pressed university officials about the
issue
for years.

OHSU began reporting in September, when it submitted
its first claim
to the board. By comparison, OHSU has been sued for malpractice dozens
of times in the past 10 years and paid out settlements of at least $6.2
million.

The Oregon Insurance Division has authority to fine
insurers up to $10,000
for not reporting claims and has general jurisdiction over Kaiser,
which
insures its own doctors. Yet division Administrator Joel Ario said the
medical board never came to his agency with a request for enforcement
action
against Kaiser.

Last year, Kaiser began reporting at Haley's
request. But the health
maintenance organization, which has 470,000 clients in Oregon and
Washington,
told The Oregonian that it has no legal duty to do so. And neither
Kaiser
nor OHSU would say whether it intends to fill in gaps in the
malpractice
reports that accrued over the years.

Legacy Health System, which insures about 200
employed and contract
physicians, also has never reported malpractice claims, The Oregonian
found.
Legacy's case, however, results from a loophole in the law that left
self-insured
systems out. Although Kaiser also self-insures, it is a special type of
insurer that lawmakers specifically wanted to report.

Taken together, the reporting gaps mean many of the
state's 9,500 active
doctors slipped through a key component of the state's patients safety
net. Malpractice reports triggered more than 10 percent of the medical
board's 313 investigations last year. Since 1995, 18 of 469
investigations
prompted by the reports led to disciplinary actions.

Though malpractice claims don't necessarily indicate
negligence on a
doctor's part, they are considered a reliable enough indicator of
possible
problems that 41 of the 70 state medical and osteopathic licensing
boards
mandate that they be reported. Thirty-two boards also require
self-insured
health systems such as Kaiser and Legacy to report.

Oregon lawmakers wanted a malpractice reporting
system that would cover
all the state's doctors, said former Sen. Joyce Cohen, a Portland
Democrat
involved in expanding the reporting law in 1987.

"The object here is to have a record here of doctors
who were not performing
appropriately. The BME needs to know that, and ultimately the public
needs
to know that, too," Cohen said.

The making of a law

Historically, the medical profession had been
allowed to police itself.
But the climate was changing in 1975, when the Oregon Legislature took
up the issue amid a malpractice insurance crisis.

Around the country, evidence had mounted that state
boards were allowing
dangerous doctors to keep their licenses, provided they quietly
resigned
and moved elsewhere. With the support of the Oregon Medical Association
and the Board of Medical Examiners, lawmakers gave state regulators
some
powerful new tools.

The board gained the power to subpoena records. For
the first time,
doctors were obligated to turn in physicians they suspected of
incompetence.
Lawmakers also required insurance companies to report any negligence
claim
filed against a doctor to the board and gave the board power to obtain
settlement details.

"We were giving the board essentially the same
powers as a police agency,"
said James Kronenberg, chief operating officer of the Oregon Medical
Association
and one of the principal proponents of the 1975 reforms.

Oregon's law had an immediate impact. Doctors
stepped up reporting,
encouraged by confidentiality rules that also passed in 1975. By 1980,
the state's rate of disciplining medical professionals was the highest
in the country.

Yet behind the scenes, problems developed. As
regulators tracked malpractice
cases, they repeatedly stumbled across instances in which reports had
not
been filed. In addition, the board's small staff was overwhelmed by the
number of claims it collected. Board members hired consultants and
volunteered
on their own to assess whether cases should be more thoroughly
investigated,
according to former board officials.

Records show that Kaiser filed numerous malpractice
claim reports during
those years.

In 1986, the Oregon board hired its first medical
director, anesthesiologist
Dr. Donald P. Dobson, to sift through malpractice reports, bolstering
the
patchwork of volunteers and consultants.

A year later, the 1987 Legislature took up the
reporting issue again
as part of a broader overhaul of medical malpractice laws that also set
limits on damages in lawsuits against government agencies.

When the problem of gaps in reporting emerged during
hearings, records
show that Dobson told lawmakers the system was worth strengthening.
About
10 percent of malpractice claims involved physicians who needed to make
adjustments in their practices, he said. And of those, one in 10
resulted
in a disciplinary action.

The Board of Medical Examiners, officials recall,
became the key advocate
for rewriting the law, which then carried a fine of $2,000 for failing
to report. Lawmakers raised the fine to $10,000, and they added
explicit
language to force "health care service contractors" -- HMOs such as
Kaiser
-- to follow the rules that applied to other malpractice insurers.

The logic was straightforward: If HMOs were paying
out settlements on
behalf of their doctors, they needed to tell regulators.

The reporting problems appeared to be solved.

"A technical cleanup"

On April 18, 1991, the House Business and Consumer
Affairs Committee
held one of the most routine -- and arcane -- hearings imaginable. The
subject: a bill intended to clean up Oregon's insurance laws and bring
them in line with other state codes.

Buried deep in the bill was a proposal to delete the
words "self-insurance
association" from the malpractice reporting law. The Insurance Division
administrator at the time, James R. Swenson, assured lawmakers the
language
was the equivalent of touch-up paint on a car, "a technical cleanup"
that
changed nothing of consequence.

The phrase "self-insurance association" had some
history. In 1975, in
the face of rising malpractice premiums, the Legislature had taken
steps
to create a state professional liability fund that would provide
malpractice
insurance to all doctors. Lawmakers drafted language on reporting
malpractice
claims to make sure the fund, called a "self-insurance association,"
would
have to comply.

The idea of a state malpractice fund eventually
fizzled. But in 1991,
the outdated language requiring a self-insurance association to report
claims remained in the law. As part of their cleanup bill, lawmakers
simply
deleted the superfluous phrase. There was no debate.

Soon after, Kaiser stopped reporting malpractice
claims to the state.

The nonprofit now says it did so because it is
"self-insured" and therefore
exempt under the 1991 change. But whether Kaiser notified the board
that
it planned to stop reporting is unclear.

In an Oct. 23 letter to The Oregonian, Kaiser
officials said the HMO
did take up the matter in 1991 with medical board managers, who agreed
with its interpretation of the law. But Kaiser declined to specify
which
board managers were involved or provide any records documenting the
1991
discussions.

The Oregonian filed a records request with
regulators seeking all related
documents, but none turned up.

Two key officials at the time -- John Ulwelling, the
board's former
executive director, and Paul Sundermier, an assistant attorney general
who handled its legal issues -- said they don't remember such
conversations
with Kaiser.

Ulwelling said he was surprised to find out from a
reporter that Kaiser
had not reported claims from 1991 to 2004. "When I left the board in
'94,
everybody assumed everybody was reporting everything they had," he
said.

The board's other senior manager in 1991 was the
medical director, Dr.
Harvey D. Klevit, a pediatrician who joined the board in 1990 after 24
years as a Kaiser doctor and manager. As medical director, Klevit
reviewed
all malpractice claims submitted to the board.

Ulwelling said Klevit, who retired in 1995 and died
Sept. 4, didn't
tell him Kaiser ceased reporting.

"We never had that conversation," Ulwelling said.

Haley cites OHSU promises

Haley came to the board in 1994 with strong
credentials. A former New
York assistant attorney general, she had worked for a decade as
executive
director of the Oregon Psychiatric Security Review Board. At the
medical
board, one of the first things she noticed was that OHSU wasn't
reporting
malpractice claims.

By Haley's reading, OHSU was swept under the
reporting mandate by the
1987 malpractice overhaul. While setting caps on damages, lawmakers
also
required public agencies to report claims against a doctor or other
health
professional in their employ. This was less than what was required of
private
insurers, which were supposed to disclose not only claims, but also
court
judgments and settlements of any malpractice case.

In meetings over several years, Haley said, lawyers
for the hospital
repeatedly assured her OHSU would begin reporting. But little happened
until September, she said, when the university reported a single claim.
The Oregonian asked OHSU for records of all settled malpractice suits
since
1995 and received a list of 28 cases.

The board has no written record of Haley's
conversations with OHSU.
Another board official, Dr. John Enbom, medical director from 1995 to
1997,
said he recalled both Kaiser and OHSU arguing they were exempt from the
law. OHSU officials also disputed Haley's account, saying they never
promised
to comply until recently.

The university's chief administrative officer, Steve
Stadum, said officials
had consistently relied on legal advice from the attorney general's
office
"15 or 20 years ago." The advice was that OHSU had an out because its
doctors,
as public employees, weren't legally liable for acts taken in their
official
capacity, he said.

Although OHSU could be sued, Stadum said, its
doctors could not. As
such, he said, the university regarded any malpractice claims that
named
its doctors as invalid and not subject to the reporting law.

Stadum said the university changed policy a couple
of months ago as
part of a broader patient safety initiative.

"It was our intention over the last few years to do
it, and we didn't,"
Stadum said. "That was a mistake."

Kaiser, state differ on law

Haley said her staff first noticed that Kaiser
wasn't reporting claims
against its doctors in 2000. She queried Kaiser officials, who asserted
the HMO was exempt because the law had changed in 1991 and Kaiser was
self-insured.

She believed that a separate section of the 1987 law
obligated Kaiser
to report. As she read it, the statute's reference to reporting by
"health
care service contractors" made Kaiser the same as any other insurance
company
covering medical malpractice.

The legislative record appears to support her view.
When lawmakers were
hammering out the final language of the law in 1987, a senator involved
in the conference committee explained that it was meant to cover HMOs
--
"Kaiser-Permanente-like structures."

Haley said she turned to the Insurance Division but
received only vague
advice.

In an Oct. 10, 2000, e-mail exchange, division
staffers discussed the
Kaiser issue. Michael Lamb, an actuary at the Insurance Division who
has
since retired, implied that the law could be seen as covering Kaiser
but
that insurance regulators did not "wrestle" HMOs into reporting
malpractice
claims.

"We didn't take that to the max," Lamb acknowledged.

Haley said a back-and-forth dialogue continued until
Kaiser agreed to
submit reports. The HMO reinstituted reporting voluntarily in late
2003,
it said in a statement to The Oregonian. Kaiser also said it had quit
reporting
in 1991 because the law changed "to exclude reporting by self-insured
entities."

But Ario, the Insurance Division administrator, said
Kaiser's interpretation
of the 1991 change is wrong. Kaiser is not "a self-insurance
association"
-- the term that was stricken from the law -- and is not entitled to an
exemption on those grounds, he said.

"The repeal of the term self-insurance association
in 1991 does not
and did not affect Kaiser in any way," Ario said. As for the medical
board's
position that Kaiser must submit malpractice claims, Ario said: "We
don't
have a problem with the BME's position requiring the reporting."

In its statement to The Oregonian, Kaiser also
contended that despite
being a health care service contractor, it is not required to report
because
the HMO does not "issue or underwrite professional liability
insurance."

Kaiser assumes liability for negligence claims
against its doctors,
and spent $17 million on public and professional liability claims in
2004.
But the nonprofit believes it is different from commercial insurers
because
it doesn't charge its doctors a premium and doesn't issue policies,
Kaiser
spokesman Jim Gersbach said.

Enforcement at issue

Although his agency has the power to issue fines,
Ario said the medical
board never asked him to do so. Haley said she didn't know fines were a
possible enforcement tool until The Oregonian asked her about them. She
said she now wants to ask the Legislature to put enforcement authority
directly in the medical board's hands.

"The board's mission is protecting the public, and
the board has to
have good information coming to it to do its job," Haley said.

After learning from a reporter that Legacy Health
System was not submitting
claims, Haley said she would send a letter to the group asking for
voluntary
reporting. Legacy spokeswoman Lisa Wood said the group had not yet
received
the letter but will "carefully review it."

Haley said she also will consult with the 11-member
board, made up of
physicians and two public members, about whether to ask Kaiser and OHSU
to fill in the missing claim data that span more than a decade.

Though some of those cases may be many years old,
they could prompt
reviews by the medical board, which automatically opens a case file
when
a malpractice payment tops $100,000, when a physician is the subject of
several claims, or when even a single claim appears to be an instance
of
gross medical negligence, Haley said.